Microsoft’s E3: A Tale of Two Xboxes

In blog posts and on Twitter, the reaction to Microsoft’s E3 press conference seemed split into two camps: those who care deeply about video games, and those who are more interested in technology.

For the gamers, Microsoft’s press conference was a letdown. Sure, the company showed off Halo 4 and trotted out the usual roster of third-party game developers to demo their works in progress, but there were no big surprises and no killer exclusives. The stuff that seemed most interesting, like the next Gears of War and the Gore Verbinski project Matter, only appeared as brief video teasers. Even a quick hello by South Park creators Trey Parker and Matt Stone shed little additional light on the upcoming South Park: The Stick of Truth.

For the techies, however, Microsoft’s E3 presentation was a treasure trove. Here was Microsoft preempting the rumored Apple television with Project SmartGlass, an answer to Apple’s AirPlay that will let users send video from their tablets or phones to the Xbox 360. SmartGlass even goes beyond Airplay by working on iOS, Android or Windows devices, and turning those phones and tablets into video companions that show additional information — such as a map of where the action’s happening during a Game of Thrones episode.

SmartGlass wasn’t the only part of Microsoft’s entertainment push. The company also showed off a version of Internet Explorer for the Xbox 360. It’s meant to solve some of the common problems with TV web browsers by letting users navigate with phones and tablets instead of game controllers, and by offering a stylized list of suggested websites to visit (pictured here). And while rumor has it that Apple is struggling to secure content for the big screen, Microsoft has signed deals with 35 new content partners, including the NBA, NHL, Nickelodeon and Paramount Pictures. Later this year, the Xbox 360’s ESPN app will offer round-the-clock live streaming of several ESPN stations — presumably for users with cable subscriptions to those channels. On the music front, Microsoft announced a Spotify competitor called Xbox Music.

Hardcore gamers might choose to overlook the entertainment section of Microsoft’s program. Perhaps they dismiss it as filler — something that distracts from E3’s true purpose to showcase the latest and greatest video games. But as Peter Skerritt pointed out on Twitter recently, “it’s not the Electronic Games Expo.” The acronym stands for “Electronic Entertainment Expo” — a moniker that’s turning out to be remarkably prescient as consoles turn into entertainment hubs.

This transition is one of the most interesting trends in the video game business today. And the overall convergence of set-top boxes, tablets, phones and PCs is arguably the biggest ongoing story in consumer electronics. Hardcore gamers can ignore this stuff if they like, and cast off Microsoft’s efforts as boring or disappointing. But woe is the video game console maker who does the same.